Thursday, March 25, 2010

Danske Bank’s EMU poll Slim Yes majority despite the euro’s woes

Statistics Denmark regularly surveys the attitude of the Danes to the euro on behalf of Danske Bank. The March poll shows the Yes side still having a slight lead – although the lead has shrunk considerably since the end of 2009. Looking solely at those who are certain how they would vote, the No side has in fact a slight majority.

Therefore one cannot conclude on the basis of this poll that a vote today would result in a Danish Yes to adopting the euro. Comparing the results against our last survey in December 2009, the most noticeable shift is in the number of certain No voters. Clearly this has to be seen in light of the uncertainty that the Greek budget problems, for example, have caused. The construction of EMU has been questioned, particularly in the international arena, and this has of course also affected Danish voters.

In addition, the Danish central bank (Nationalbanken) has been able to narrow the official interest rate spread to just 5 basis points over the past year. This makes the cost of not being a euro nation appear considerably less than it did just one-and-a-half years ago, when the rate-spread briefly rose to 175bp. That said the excess interest rate in Denmark is in reality still considerably higher than before the crisis.


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